USDA reaches pork checkoff settlement

USDA has announced it has reached an out-of-court settlement agreement in the lawsuit filed against it concerning the pork checkoff referendum. At issue were the actions taken by then-Secretary of Agriculture Dan Glickman in calling for the referendum and the subsequent outcome.

The lawsuit — filed by independent pork producers in Michigan, the Michigan Pork Producers Association and the National Pork Producers Council (NPPC) — argued that the secretary did not have legal authority to call for a referendum on the pork checkoff, did not have the legal authority to terminate the pork checkoff and, citing the numerous irregularities in initiating the referendum and the voting process, maintained there was no clear determination of the true outcome of the vote.

A key component of the settlement agreement allows for the continuation of the mandatory checkoff.

Other provisions in the settlement agreement include:

The agreement requires a distinct separation between the National Pork Producers Council (NPPC) and the National Pork Board. In effect, that means that NPPC’s role, as general contractor to implement checkoff-funded pork promotion, consumer education and research initiatives will be terminated. In the future, the National Pork Board will assume full responsibility for implementation of those programs.

The agreement specifically points out that “all NPPC staff who perform predominantly checkoff-related functions shall be given the opportunity to transfer their employment to the (National Pork) Board.” To qualify, any current NPPC staffer’s compensation must be at least 50 percent allocated to the Pork Checkoff Program to be eligible. This rule applies equally to the chief executive officer (CEO) and chief financial officer (CFO) positions at NPPC, too. Therefore, any NPPC employee who has performed predominantly non-checkoff related functions (of a policy-setting nature) may not be employed by the National Pork Board while performing those non-checkoff-related functions for NPPC nor can they be employed by the National Pork Board for two years after ceasing to perform those non-checkoff related functions. The restriction basically applies to the NPPC staff in Washington, D.C.

Joint communications efforts with NPPC and the National Pork Board will no longer be allowed at the national level. However, state pork producers groups may sponsor communications containing both checkoff and non-checkoff issues and materials.

The settlement agreement also calls for a survey of all eligible pork producers and importers to be conducted by the USDA sometime after June 2003. The purpose of the survey will be to evaluate the effectiveness of the settlement agreement and the on-going allocation of checkoff funds. If at least 15 percent of producers and importers express concerns about the pork checkoff and favor a referendum at that time, one will be held in accordance with the Pork Act. USDA or its successor responsible for overseeing the checkoff will pay for survey costs.

Annual meetings of both NPPC and the National Pork Board, scheduled for March 8-10, may proceed as planned, according to the agreement. However, after the annual meetings, NPPC or any succeeding or similar organizations may not be involved in nominating producers or importers to serve on the National Pork Board.

Additionally, the agreement provides that the National Pork Board may lease the office space from the NPPC, who owns the headquarters building in Clive, Iowa, at fair market value. Following the transition period, NPPC staff offices can no longer be housed at that address.

Finally, with the agreement, all claims against USDA were resolved.

On behalf of the plaintiffs of the lawsuit, Pete Blauwiekel, producer from Fowler, Mich., stated: “Through this settlement, we have been able to help pork producers across the U.S. maintain their access to promotion, research and education funded by the checkoff. We believe that USDA’s participation in the Settlement Agreement reflects their genuine concerns regarding the referendum and the way it was conducted.”Blauwiekel says the injunction was filed on behalf of pork producers to ensure they got a “fair shake” in the referendum.